1 YEAR OF BS-VI
A year ago, on April 1, 2020, the Supreme Court of India rolled out the Bharat Stage VI emission standards across the country, after India leapfrogged directly from BS-IV emissions standards to BS-VI. The announcement aims to cut emissions by 80-90% from the new vehicles.
But the Indian auto industry, which was already grappling with the deadline of BS-VI emission norms, suffered a second blow during the period due to, then, newly imposed pandemic lockdown. According to the Society of Indian Car Manufacturers or SIAM, during this period, the automotive industry suffered a loss of about Rs 2,300 crore per day due to the lockdown.
However, there has been a gradual boom in the economy for the past few months, and higher-than-expected sales of automobiles, particularly in the 2-wheeler segment. Retail sales of passenger vehicles grew 10.6% in February from a year earlier, as people invest in personal transport modes instead of shared mobility.
Journey So Far
India has come a long way to improve tailpipe emissions from vehicles since the commencement of the Bharat Stage I (BS-I) emission standards in 2000. Over a period, a significant change has occurred due to technological replacement and adoption by the automobile industry level. For example, emissions standards were initially improved in major cities, while in the rest of the country, after about five years. One such example is Delhi and parts of NCR, which was the first to receive BS-VI 10 ppm sulfur fuel before it was made compulsory in the rest of the country.
Similarly, BS-VI compliance requirements have opened opportunities for OEMs to be an innovator in battery technology along with valve trains for friction reduction, flexibility, and advanced combustion technologies. However, this new standard has challenged suppliers to align the supply chain in ways that minimally affect vehicle costs.
Need of the Hour
India is in the grip of explosive motoring and pollution. More than 70 percent of Indian cities classify as severely polluted and vehicles are among the highest risk sources. In cities like Delhi, vehicles contribute up to 40 percent of the pollution load. Since vehicles cease pollution on roads for at least 12 to 15 years, it becomes necessary to stock new vehicles to clear the emission criteria.
A study by the International Council on Clean Transport has revealed that exhaust from only on-road diesel vehicles is responsible for nearly half of premature deaths worldwide. Delhi ranks sixth among the 100 major urban centers assessed for deaths related to the transport sector.
The Indian automotive industry and most importantly, the passenger vehicle sector, is currently preparing to reduce the cost impact of this compliance and to create a balanced powertrain portfolio combining petrol, diesel, and, to a lesser extent, electrified propulsion systems. Many OEMs have already been marked in electrification strategies to create the right hybrid product mix for the Indian market.
Mild hybrid technology will disrupt the automotive industry, with its unique value proposition helping OEMs adhere to fuel economy standards and sustainable solutions. Various OEMs, most notably Maruti Suzuki and Mahindra & Mahindra, are focusing on MHEVs to improve fuel efficiency and making cars more affordable during their ownership.
Road Ahead
Leapfrog is an important step for BS-VI emission standards that needs leverage to maximize emissions and health benefits. There has been more change from pure IC vehicles to lighter hybrids than diesel to petrol engines. Diesel engines will remain a part of the industry for a few years to come.
India needs significant structural reforms to identify opportunities in manufacturing, urbanization, and sustainability to achieve the required employment and productivity growth in the country in the coming years. Moreover, the cost of compliance in diesel engines will be higher due to the need for expensive post-treatment technologies. The petrol engine, on the other hand, will use technologies for better combustion, injection, and compliance to make significant progress in fuel efficiency and power generation.
Given the current market conditions, the adoption of electric vehicles in India will help revive the economy. The government targets 30% electric vehicle penetration by 2030, to make the components economically viable in the country. The Faster Adoption and Manufacturing (FAME 2) program of hybrid and electric vehicles has provided policy stability, but state-level programs will be required to achieve the central government plan.l
To sum it up, India is striving to reach global standards, and therefore, changes in trends, sales, and options have already been made in the automotive industry, while some are expected in the coming years.
